I\'ll rate do all parts Sales Mix and Break-Even Sales Data related to the expec
ID: 2397642 • Letter: I
Question
I'll rate do all parts
Sales Mix and Break-Even Sales
Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows:
The estimated fixed costs for the current year are $238,560.
Required:
1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year.
units
2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year.
3. Assume that the sales mix was 60% laptops and 40% tablets. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year.
units
Why is it so different?
The break-even point is in this scenario than in part (1) because the sales mix is weighted heavily toward the product with the contribution margin per unit of product.
Products Unit Selling Price Unit Variable Cost Sales Mix Laptops $280 $190 40% Tablets 410 190 60%Explanation / Answer
Let us compute unit contribution of both Laptop and Tablet each one together
Sales : ($280 × 40%) + ($410 × 60%) = $ 358
Less: Variable cost ($190× 40%) + ($190× 60%) = $190
Unit contribution margin = $358-$190 = $ 168
Break-even sales = Fixed Costs / Unit Contribution Margin
1.Total Product break even sales in units
$238,560. / 168 = 1420 units
2. Break even sales in units Both Laptop and Tablet
Laptop (1420x 40%) =568 units
Tablet:(1420 x 60%) =852 units
3. Let us compute unit contribution of both Laptop and Tablet each one together
Sales : ($280 × 60%) + ($410 × 40%) = $ 332
Less: Variable cost ($190× 60%) + ($190× 40%) = $190
Unit contribution margin = $358-$190 = $ 142
Break-even sales = Fixed Costs / Unit Contribution Margin
3.1.Total Product break even sales in units
$238,560. / 142 = 1680 units
3.2. Break even sales in units Both Laptop and Tablet
Laptop (1680x 40%) =672 units
Tablet:(1680 x 60%) =1008 units
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